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asked Jun 15 in Commerce by askzimstudent (5,930 points)

1 Answer

+1 vote
Best answer

The major difference is how each earns.

Debentures earn fixed interest while shares earn dividends.

If this comes as an exam question it is best to create a table and list the differences in contrast.

Other differences are that:

Shares Debentures
Shareholders own the business Debenture holders are creditors
Share dividends are paid when a profit is made Debentures are paid in the presence or absence of profit generation
Shares have a risk on investment Debentures have no risk

Using such a table and expanding on points where necessary will gain you full marks.

answered Jun 15 by mr-lee (7,940 points)
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